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tv   Taking Stock With Pimm Fox  Bloomberg  September 16, 2014 9:00pm-10:01pm EDT

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>> this is "taking stock" for tuesday, september 16, 2014. i'm pimm fox. today's theme is awarding. elon musk has been given $7 billion in federal funding in order to take nasa be on the international space station. plus, the chief executive of sprouts organic market. organic food customers are warning his company with more and more sales. and i will be joined by the chief executive of j.p.
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crickets. ivy leaguers are awarding their business to this shoemaker. all that and more over the next hour. but first, headlines from my radio cohost, carol massar. >> cisco reported third-quarter revenues that missed analyst estimates. it reflects a slower than expected projection of its design sales. adobe also felt short of analyst predicted stock. lower in after hours trading. and spacex will split billions of dollars for a manned mission beyond the moon. a third contender, sierra nevada, was shut out. and target is expecting about the same at the holiday rush as it had last year. back to you. >> thanks very much, carol massar.
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the u.s. is stepping up its efforts in the fight to contain the deadly ebola virus. earlier this afternoon, president obama committed about 3000 troops to help deliver sanitation kits, body bags, and help build treatment centers. here is an example of how do i or the situation is in west africa. >> hospitals, clinics, and the few treatment centers that they do have have a min -- have been completely overwhelmed. and the public-health system is near collapse in these countries. patients are being turned away, and people are literally dying in the streets. fax now for insight into what it's like to fight ebola virus first-hand. i want to bring in dr. dan lucey. he comes to us from georgetown university in washington, d.c. he recently returned from sierra leone to treat victims of ebola and will be heading to liberia
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later this month. dr. lucey, thank you for being with me. what is different about this i'll take -- this outbreak of ebola over previous outbreaks? >> the primary difference is that it is a urban ebola as well as rural ebola. the past 25 outbreaks since 1976 in effort have never involved large cities. now it has come to large cities, the capital of three countries where it has become epidemic and continues to worsen dramatically each day, each week, each month. >> it is the kind of global virus that gets dealt with when it's contained in the area in which it is currently being diagnosed? or in those instances when it moves to different continents, different cities? >> first, we need to do our very best from an international point of view to contain, and then to
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stop this ebola virus epidemic in the region in west africa where it is still limited at this time. but there is that risk that it would spread to other countries in africa, or to other continents. >> give us the science about the vaccines and the medicine that can be used to fight this. >> unfortunately right now, there are no licensed safe and effective vaccines, or entire of -- antiviral drugs, or immunological treatments, such as antibiotics. in the minimum, months or years for us to have a vaccine or immunological based treatment. that is why i think this
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epidemic will continue for, perhaps, two more years. >> dr. lucey, speak a little bit more about your home personal risk that you have taken in order to deal and to combat ebola virus. >> my risk is minimal compared to the risk that many health care providers in liberia and sierra leone and guinea and nigeria and senegal face on a daily basis now because of the widespread nature of this virus, particularly in liberia and sierra leone. many of my colleagues have come infected with the virus, and more than half of them, more than 135, are dead from the be -- the ebola virus. >> can you describe the conditions under which you expect to continue your work? >> i'm very honored and excited about being able to go work in monrovia, liberia for six weeks starting in early november. i will be going over with doctors without borders through the new york office, and then
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through the brussels office. to work in an ebola treatment center. right now, they don't have nearly enough beds, so patients are being turned away. and when someone is ill, they are also contagious. we need to have more beds in the ebola treatment centers. i was very happy to hear president obama stating that it is high priority and there will be more than 1000, perhaps even 1700 beds provided hopefully very soon in the coming weeks. >> dr. lucey, how can the government reach out to you? how can you be a resource for all of these efforts based on your experience and current participation?
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>> again, i don't play a central role particularly. i try to talk with colleagues in public health and medicine at the u.s. centers for disease control, the u.s. national institutes for health, the u.s. drug administration. >> do you have your own laundry list of what you would like to see done in the next three months? >> yes, absolutely. many of us who have worked in the region and continue to work, my time is relatively short, just three weeks. my point of view as a position seeing the patients -- a physician seeing the patients, it's important to have a substantial amount of money and resources. but to me, the most important thing is that the health care providers and patients receive what they need. it's not what gets shipped into that country -- all of these things are necessary, but insufficient to provide what is needed. >> what are some basic utilities that are seen some way hampered or not in supply? >> it sounds mundane, but adequate personal protective
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equipment. >> like hazmat suits. >> yes, that is the general term, yes. you need to wear personal protective equipment that keeps you from getting infected with the virus. unfortunately, the most of the 260 health care workers that were infected in west africa did not have arsenal protective equipment, and/or did not receive the proper training on the use of that equipment, which is something we were able to participate in, that training, and sierra leone when i was there in august. >> what will happen if nothing more is done to combat ebola virus?
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>> well, thank god, that is not a possibility anymore. that -- there are things happening now. the question is, they are necessary, but will they be sufficient? if not enough is done -- that is my big concern, that not enough is done. certainly, not enough has been done up until today. but after president obama's speech this afternoon, it was very encouraging. we will know within a matter of weeks, and if it's not sufficient, then it needs to be scaled up again. it is very crucial that we take a regional approach. it's not just liberia or guinea or sierra leone. it's the region. you cannot stop the virus in one country and have it out of control in an adjacent country. you need a coalition of public health professionals coming together against a common enemy, and that is, the ebola virus. it is somewhat akin to the effort to control and stop and eradicate the smallpox virus in the 1960's. that was led by the u.s. and many other countries.
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we need to do that now with the united states, with china, with cuba working with sierra leone, with the u.k., france, russia, also working in the region. we need that kind of regional collaboration across nationalities. again, u.s., china, russia, cuba, u.k., france, and many other countries. >> i want to thank you very much for sharing all of this with us. dr. dan lucey, an expert from georgetown university in washington. coming up, politics and space travel collide. how about relying on russian jet engines to get you around the space station? not likely, not unless you are going to depend on boeing and elon musk's spacex. shopping is a crowded field. we have the chief executive of sprouts market, who says he's doing things differently. ♪ >> this is "taking stock" on
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>> this is "taking stock" on bloomberg. i'm pimm fox. right now, there is only with for the u.s. to get to the international space station, and it runs right through a russian jet engine. that is about to change. later today, when nasa awarded contracts to boeing and spacex to build a new spacecraft and rocket. joining me is michael lopez allegory, the commercial -- the president of the commercial space flight industry and also joining me is dale ketcham, chief of strategic alliances at this eighth florida. michael, i will begin with you. in your role, what is your response to this contract?
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i guess it will be worth about $7 billion eventually for boeing and for spacex to rely much -- relaunch the domestic space industry. >> this is a great day. it is a little bit like your birthday, because we knew the announcement was coming, but did not know when. the critical information is that they made the announcement to two different companies. that is important because it encourages competition. nasa is in the process of making access to space a domestic capability again and they are doing it by wisely choosing to different companies so we can keep control of cost and schedule as well as having small operational redundancy if there is a problem with one or the other vehicles. >> dale ketcham, what is based lord i? >> we are a special district in the state of florida, not unlike a seaboard authority or an airport
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authority. we own things like the atlas five launch site that will be the vehicle for putting the space capsule into orbit. it is owned by the state and lockheed martin. >> i want your reaction to this news. this will mean increased launches from the space center. >> absolutely. it's a great day for florida. because they will all launch from here. michael was very correct in saying this is great for everybody, because we do keep the competition. it keeps the commercial and commercial crew. there was some congressional pressure to down select to one, but we know what happens when there is only one contractor providing a service to the government. this is going to be good. the only person who loses in this is vladimir putin, and that is not a bad day.
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>> michael, go ahead. explain why dale says vladimir putin, the president of russia, this has to do with the actual rockets currently being used. give everyone the details. >> as you pointed out, right now, the astronauts can only get to the iss traveling on a russian rocket. i did it. it's a very safe and reliable vehicle, but the fact is, it's not american. every once in a while we have these geopolitical crises that pop up, like right now over ukraine. and you could see our space program becoming hostage to that, and that is something no one wants. what this allows us to do is to return the capability of a launch from u.s. soil. that is a win for everybody. we will continue to use the russian vehicle that we use. we will probably spend -- send some russians and americans on each type of vehicles to preserve redundancy. it is a very important step, and i'm looking forward to seeing how this plays out in the next
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couple of years until 2017 when we hopefully have the first launch. >> michael, i'm wondering if you could comment on spacex and it's position in the commercial launch, but also the nasa launch business. >> they have been an extremely disruptive force, a really attacking prices, and they have been able to do that by employing modern design techniques, and your -- modern manufacturing techniques, and structures were they bring in sheet-metal and small parts in one end of a building and rockets and capsules come out the other end. when you do that, you control costs and schedule and production. their prices are shaking up the commercial launch industry, just as you stated. >> thank you, gentlemen, very much. my thanks to michael lopez-alegria and dale ketcham. coming up, hoping to capture the feel of a farmers market with
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prices as load as a roadside country stand. it sounds like a song. it also a risky for success for sprouts market. you will meet the chief executive next. ♪ thanks this is "taking stock"
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on bloomberg. i'm pimm fox. a recent study found that good at sprouts markets on average were about 13% less expensive than its competitor, whole foods. sprouts is seeking massive success and is expanding at a rapid pace. the arizona-based grocer is
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opening its fourth store in the atlanta area tomorrow, and that is where we find the chief executive, doug sanders. congratulations on the opening of the new store. tell people a bit about how sprouts came to be. it was a combination of over a certain time and then it was a private equity, and now you are on your own. tell us about the background. >> sprouts was founded in two thousand two with the mission of making healthy food choices at affordable everyday prices. then -- the natural foods catered to the high income earners and left the middle income earner largely underserved. when you look at the impact of the health and wellness movement and how it is reshaping the
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industry, the fastest-growing consumer group that is adopting a diet is the middle income consumer. we have grown from one store in 2002 to over 190 stores across the u.s. we are experiencing tremendous growth and taking advantage of the big growth and natural organics. >> i wonder if you can tell us a little bit about the transition from being a part -- private company to a public company. >> it has been a great experience. obviously, we grew 50 up to 50 stores in 2010. in 2011, would did the transaction with apollo and acquired the henry's organization and then the year after we acquired the sunflower organization. and last year, we went to look. the company performs well and continues to take advantage of the growth in the natural and organic sector. >> the stores, the sports -- sprouts farmers stores are a smaller footprint than whole foods, for example. who do you consider your direct competitor? >> the primary competitor we have in every market we consider
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to be the traditional grocery store. when you look at the fact that we target the every day grocery shopper, the average middle-income consumer, the traditional grocery store is our primary competitor. >> right now, you are not in every state. i'm wondering if you can give us a geographical dispersion. you are originally from texas. you also compete with kroger in some cases and whole foods in some cases? >> sure, when you look at the markets we operate in today, as those are some of kroger's most successful markets. and they are also some of whole foods most successful markets. we compete throughout all of the markets we are in. the growth is coming from the middle income consumer. that is the consumer we are attracting. our market strategy is geared to that consumer and that is where we are taking market share and
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good customers from the traditional grocery space. and secondarily taking them from the specialty competitors. >> what about when it comes to fresh produce? there is something different about the way you price those products. >> produces about 25% of our total store sales. and we price 20% to 30% below the supermarket, and even further below the specialty retailers. the reason we use fresh produce is because we are trying to attract the everyday grocery shopper. that produce is the common denominator between those different groups of shoppers. it allows us to cast a wide net. >> thank you for spending time with us. doug sanders is the chief executive of sprouts farmers market.
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it is 26 minutes past the hour, and that means it's time for a check on the markets. the dow jones industrial average adds over 100 points for a gain of 0.6%. the s&p is higher as well and the nasdaq up by 33. ♪
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>> this is "taking stock" on bloomberg. i'm pimm fox. the federal reserve began a two-day meeting today. tomorrow, they will release a statement and fed chair janet yellen will hold a news conference. for insight on what to expect, i am joined by anastasia amoroso, global market strategist at j.p. morgan funds. also with me, josh wright, bloomberg economist and former analyst for the federal reserve. speak freely about the federal reserve. what do they do over these two-day meetings? is this a very formal thing? did you ever get invited?
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>> i got invited to things like that. a very select group of people. >> you are a very select person. but i do what i can. >> clearly. >> a lot of work goes on before the even get to the meeting and that affects the choices they have in the meeting themselves. these meetings are recorded and they release the transcript years later. so they are relatively scripted affairs. >> and that means lots of binders and presentations by the expert to come with all of the members of the fomc. >> janet yellen is famously over prepared for these meetings. she was such a great economics student and she was at yale that evil saved her study notes and pass them on to student to student. >> did you ever get any of janet yellen notes? >> i did not. >> you know people like that. you went to school to earn your degree.
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tell us about the mindset of someone like that. >> i am famous for over preparing myself, so in a way, i can relate. but in talking about the meeting tomorrow, clearly, there is a lot of preparation that goes into it. the action we should be seeing is some sort of change in forward guidance. my take is that it had been date dependent thus far. i think we will see a shift to data dependent. we know that qe already was data dependent, but it was -- it is now about reconsidering the considerable amount of time, while the fed still keeps rates low after the qe ends. i'm hoping to get an exclamation tomorrow -- explanation tomorrow in the press conference. >> what do you expect them to say?
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i don't mean to ask you to divine the tea leaves, but what are you telling your clients? >> the first one is about posture. as we look at the cpi, and we are getting close to that 2% inflation target, that is what it seems. but that is not what the fed looks at. they look at the core pc. that is why the 1.5% is not quite to the 2% level. that is where we save a -- there is more -- that is where we say there is more slack. and we heard a lot about this at jackson hole, the fact that there is still a considerable amount of slack. i expect to see them say something tomorrow about how they plan to deal with the slack. and the rate will hinge on how fast that slack is being taken up. >> josh, your thoughts on the slack in the labor force?
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>> this is janet yellen. she has the microphone at the press conference. she is sure to emphasize that there is still slack and they will continue a common data policy. but she's got to start switching away, as anastasia is pointing out, this notion of who being locked in -- the notion of being locked in to a specific stance. it needs to be informed by the data. the challenge is making that change without making the market think it is a big change. >> he brings up an interesting point, because the fed would not mind seeing some volatility or he -- some volatility in the market. volatility in the fixed income markets, perhaps demise what they want to see. not a lot, but probably at the long end of the curve. and of course, in the fixed incoming -- instruments. -- fixed income instruments. >> what are they looking for? >> it used to be that it would be low for longer, but now we are moving to not much longer. >> i think the fed is still
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concerned about the taper tantrum that they saw in 2013. ben bernanke came out and said they may actually taper and basis points rose within a couple of months up to 150 basis points. they want to see a reasonable range, not massive spikes. that is what is ultimately going to shape the language of the statement we get tomorrow. this will represent what their consensus view is on how to get a bit more healthy volatility, while avoiding the dangerous, out-of-control volatility. >> i hope you keep us posted. i know you will. you will be following the statement tomorrow. i look forward to your thoughts on what we get from the federal reserve. as always, anna sachse -- anastasia, thank you for being with us. and bloomberg's own josh wright. coming up, a mere $4000 per square-foot price tag.
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find out who is buying into this. also, speaking to the founder of jb cricket -- j.p. crickets, loafers that customers are just chirping four at $300 a pop. ♪ >> this is "taking stock goes quote on bloomberg. i'm pimm fox. >> this is "taking stock goes
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quote on bloomberg. i'm pimm fox. with the collegiate sporting season in full swing, you will want to don your alma mater with some class. j.p. crickets can help with this. it sells high-end logos on its loafers. i sat down with its founder and found out how she got started in the business. >> i found myself as a mother,
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sporting around with my family, and i thought as i looked at colleges with my children, what am i going to wear here? i did not want to wear a ball cap was up and i was not at an age where i felt great in a t-shirt. what would i want to wear? a light bulb went off and i thought, shoes. that is how it happened. >> you marry the idea of the collegiate logos and the alma mater muscat and you marry that with -- mascot and you marry that with elegant italian slippers. >> i live in a warm climate. i want to be comfortable and look good. why not look good? you never get it second chance to make a first oppression. it's a good way to be comfortable and casual. >> but you cannot just say, i want to do this and the lightbulb goes off and miraculously, it appears in the store. how did this happen? >> i tried -- i decided to make it a project with the family. we studied manufacturing in asia
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and we took some trips. i said, i guess we can do this. i'm italian, so i preferred to do it in italy. they are experts with fabric and suede and leather. i think they are probably the best shoemakers in the world. we had them make it, and started doing some things. i went and got licensing. any kind of happened. i woke up one day and said, i think i'm doing this. >> where did you start in terms of colleges? you went to princeton and said, can you do this? >> i did, because i thought they had a lot of spirit and bravado. and i thought about the sec. the sec is very celebratory. i thought they would have fun at tailgate, oldness, uva -- old myths, uva and others. i am a traditional, old school kind of preppy girl, so it suited me.
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>> what can you see in terms of growth of trend? are there certain schools that have taken to this like ducks in water? >> it goes up and down. we do great is this in columbia. it is hard to pick. it is like having 70 different children and saying, which one do you like better? i would say uva, at yale, harvard, columbia, those are the ids that seem to be doing well. cornell as well. and what we work with a school, of course they do well. and old miss, and we are doing it at university of miami. we are doing well there. i spent some time this summer studying the business in asia, and they love our american universities. that market will be a good
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market as well. but they like having the logos of american universities and colleges and they would wear them themselves. >> absolutely. a lot of people are dreaming of sending their children, and a lot of foreign executives have gone to our universities over -- from all over the world. >> i mentioned the venture with brooks brothers, being able to purchase these through the brooks brothers stores. what about the idea of going direct to consumer? >> we are direct to consumer. that is what we have been doing with e-commerce. we have a really nice e-commerce site. go to your school, picked it, order it. i work with customers online. we do a lot of custom. we did a wedding in charleston with 13 grooms. would you clubs and private things as well as women you want to give them to their husbands. we go up to size 14, so we have a lot of big athletes and unusual people who are saying, i cannot buy shoes anywhere. we do women's up to size 11. we do athlete organizations,
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which you can imagine are bigger bodies. it is a great place to find shoes when you cannot find exactly what you need. >> and obviously, you will not run out of connections with universities and colleges. this is just getting started. >> it is just getting started. we are having a lot of fun. i signed a sponsorship with the ivy league, and that has been great. i learned from a lot of great people in my previous work. >> you were in the cosmetics business. >> yes. you get lucky in business. i don't want to be trendy and i don't want to be lucky. i would rather be long-lasting. and i enjoy it. i'm at the point in my life where i love making the relationships with people. i love hearing a father or a sign or a business guy saying, i have to have these for my dad, or he would go crazy. or this professor means so much to me. >> can you give them the volume of the business you are
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currently doing? >> our business is up 100%. they would not be a volume like t-shirts or all caps. as a price point. but is it self funding at this point? -- >> but is it self funding at this point? >> it is self funding. we spend a lot of the year looking at e-commerce, university bookstores and where we should be. but i think we have to offer it direct to consumer quick and easy. people are on their phone and they want to get it right away. we ship very quickly. we are one-on-one with the customer. e-commerce is probably the easiest, fastest way to get it from us. >> my thanks to j.p. crickets chief executive and founder, susan meyer. if you are looking for an apartment with a view in new york city, you will wait two
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years. i will introduce you to a developer hosting some of the best views around. but it's got a hefty price tag. that is next. and coming up on "bloomberg west," it has been a busy week for netflix, expanding into additional european countries. it just launched a brand-new comedy series. will these moves pay off? find out at 6 p.m. and 11 p.m. eastern only on bloomberg. ♪ >> this is "taking stock" on
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bloomberg. i'm pimm fox. according to one research report, the average price of a two bedroom in manhattan is about $4000 a month. that'll get you about one square foot in a new luxury building that is set to debut in 2016. i am joined by its developer, ian schrager and john pawson, the interior divider -- designer. those are the two shortest
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introductions for you two gentlemen ever, don't you think? >> not too bad. >> let's talk about the solomon at 215 -- this development at 215 chrystie and why it is specific to you. >> it is more interesting than anything currently available on the market. it has the dream team. from new york, paris, london. you put all those people together and you will have an apartment that you would not otherwise have. but did you know you are officially a part of the dream team dax -- >> did you know you are officially part of the dream team? there will be t-shirts later on. >> it is different from any other developer, in my experience.
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>> give people a bit of insight into your previous work. you began in your adult life i teaching english -- by teaching english in japan. but then you went back to the u.k. and studied architecture. there have been a lot of influences in your work. >> i'm from yorkshire, so that is also a very strong thing that doesn't leave you. >> what about that doesn't leave you? >> well, i think that the -- i mean, halifax was an industrial revolution town. it's all made of the same stone, very simple, and nonconformist ethics with its lack of ornamentation. that influenced me. the thing with en, he really got my career started because he
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introduced calvin klein to my work. >> the calvin klein store -- >> on madison avenue. >> what are you bringing to the project at 215 chrystie. >> ian is very detail oriented, and the two of us are together. the types of materials -- nine clicks what types of -- the types of materials, for example. >> what types of woods and other materials? these are very spacious examples of living, aren't they? >> yes, a tremendous feeling of space and proportion. very high ceilings. >> and spectacular views, as you can see from the photographs. >> what does it say about putting it on this particular block at this particular time? >> it's a classic example of uptown meets downtown. i think, culture and fashion and
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all of the energy going on in this city is downtown. and i think this is the center of the center. >> and the center of the center happens shifted for you, because i note that you are one of the creators in hotels such as the royalton and various brands. give us an idea of your pedigree and what you hope to bring to this project. >> one of the first projects i
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ever did was studio 54. we like to forget about that sometimes. then we did morgan's and royalton, and hotels all over the world. i like to think we invented the boutique hotel. i had a partnership with marriott, creating a brand for them. as well as my own hotels. and we like doing residential apartments when we think we can do something new that has not been done before. >> if someone had said while you were growing up in east flatbush in brooklyn, that you would be responsible for all of these hotel groups, many of the -- well, you could call them the coolest places that have entered into the history of entertainment -- what would you say? >> work as hard as you can and hope for a little luck, and hope that you can live your dream. i am living my dream. i love what i do and i would do it for no money. >> what is next after this open? what else do you want to do?
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do you want to expand the brand? >> i'm happy to do this project in new york. we've been all over the world in europe and asia and china and india. >> where is the best place to do business right now? >> always america, and always new york. >> really? >> you get a lift here. it's as the song here. -- it's as the song says. if you can make it here, you can make it anywhere. >> do you agree, john? >> it has changed my career, working in america. >> what is next for you? >> is very interesting. we have a very different project. i always like to do something different, so we are still willing churches. we are still doing ballet sets. there may be another bridge. >> tell them of one bridge you are well known for. >> we are very lucky to be able to wear -- to work in kew gardens in london, because it has an historic pedigree of amazing buildings. they asked me to do the bridge across the lake there, which seem to me to be fitting. >> maybe you could get john to build you a bridge? >> i haven't thought about it, but of course, i'm open to anything. john is an incredible talent. so refined and so pure and i'm fortunate to be able to work with him.
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>> did the whole thing come in on budget? >> it always comes in on budget. >> and on time. >> and on time, exactly, yes. when does it officially open? >> not until 2016, because it is quite a large project. it is about 30 floors and $300 million. >> will you have an apartment in their? >> i will have to ask my wife that. >> good answer. how about you? will you take and -- an apartment area complex architects are salaried people. >> i will leave it there. -- will you take an apartment there? >> architects are salaried people. >> i will leave it there. thank you for "taking stock." i'm pimm fox. good night. ♪
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